Is It Too Late To Consider Buying Vinci SA (EPA:DG)?

Let's talk about the popular Vinci SA (EPA:DG). The company's shares saw a double-digit share price rise of over 10% in the past couple of months on the ENXTPA. The company's trading levels have approached the yearly peak, following the recent bounce in the share price. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine Vinci’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Vinci

What's The Opportunity In Vinci?

According to our valuation model, Vinci seems to be fairly priced at around 19% below our intrinsic value, which means if you buy Vinci today, you’d be paying a fair price for it. And if you believe the company’s true value is €144.55, then there’s not much of an upside to gain from mispricing. What's more, Vinci’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Vinci generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by a double-digit 20% over the next couple of years, the outlook is positive for Vinci. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in DG’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on DG, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Vinci, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Vinci has 2 warning signs and it would be unwise to ignore these.

If you are no longer interested in Vinci, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.